Jim McDougal Draws Three Years in Prison

Helping the prosecutor nets McDougal a reduced sentence; Is Clinton still absolved? 'I wouldn't go to the bank on that'

LITTLE ROCK, Ark. (AllPolitics, April 14) -- Jim McDougal, the former Whitewater business partner of Bill and Hillary Clinton, was sentenced today to three years in prison and a year of house arrest. He had faced as much as 84 years of imprisonment, but Independent Counsel Kenneth Starr recommended a reduced sentence.

McDougal was convicted almost a year ago of 18 felonies involving his now-defunct Arkansas savings and loan, Madison Guaranty, but his sentencing was delayed after he agreed to cooperate with Starr's investigation into his failed Whitewater partnership with the Clintons.

In court, Starr described McDougal as being at the "epicenter" of his case, and said that his testimony has led the independent counsel's office to additional evidence that independently corroborated McDougal's story.

U.S. District Judge George Howard sentenced McDougal to three years in prison, three years' probation and a $10,000 fine. McDougal also faces one year under house arrest after the prison sentence is completed and was ordered to pay, "if able," $4.27 million in restitution to the Small Business Administration and the Federal Deposit Insurance Corporation (FDIC).

Starr's effort for a reduced sentence for McDougal is seen as bad news for the Clinton White House. McDougal also hinted that his evidence could be damaging. Last year, the Arkansas businessman was asked if his testimony would absolve his former friends of wrongdoing. When asked if this statement was still operative, McDougal said, "I wouldn't go to the bank on that."(160K wav sound)

Starr has been interested in the relationship between Madison Guaranty and Whitewater, and wants to know whether the failed real estate deal contributed to the S&L's failure, which cost taxpayers well more than $60 million.

Following the court proceedings, Starr expanded on the new information, saying McDougal "has assisted us and continues to assist us in having a fuller, broader, deeper understanding of that evidence.

"It has led us to those documents and it has led us to witnesses. That information has come to us that was previously unknown to us ... moreover, that that information previously unknown to us is known to a very few people." (352K wav sound)

McDougal told reporters, "I am not peddling truth or asking people to believe anything. I have simply responded and I think the documentary evidence will substantiate anything I have said to the independent counsel." (192K wav sound)

On the sentence, Starr said the court took into account McDougal's cooperation with prosecutors as well his medical condition and rightly decided to "temper justice with mercy."(416K wav sound)

McDougal expressed satisfaction with the verdict, saying, "I think Judge Howard has been relatively understanding considering all the charges."

In an interview with CNN's Bob Franken on Sunday, McDougal said, "I feel a great deal of remorse for what I have done ... and I hope that I can be forgiven by the people that I have hurt."